I blog about free markets in medical care and transparent pricing.
Influence peddling. Pandering. Political spin. Doesn’t get any more obvious than the article here. People from the 43rd congressional district (California) have sent this man, Joe Baca, to represent them. As I’ve written before, declaring this man ignorant lets him off the hook. Knowing that the end result of more government involvement in health care will result in horror stories like the one I recently told in “Oh Canada,” this man must have written this piece with something other than ignorance guiding him. Let’s look at what he says.
1) 2.5 million have been able to stay on their parent’s health plan until the age of 26. This, of course, has increased the price of the policy for which the parents pay, making it much more likely that this previously, barely affordable coverage, is now unaffordable, leaving all in the family uninsured or medical wards of the state.
2) Lower drug costs for seniors. These top-down price controls have caused…ready?…if you guessed shortages, you go to the head of the class. The market’s absence in the pharmaceutical market is bad enough without D.C.-mandated price controls and the resulting drug shortages.
3)Free preventive services for seniors. O.K. Nothing is free, right? What he means is that these new services are free to certain people, very expensive for the rest of us. This is really evil stuff.
4)Guaranteed protection for 17 million children. Be ever cautious of the politician that starts talking about the welfare of babies. As the NSA goon in “Hunt for Red October” told Dr. Ryan, “..when I’m not kissing babies, I’m stealing their lolly pop.” Any new requirements or regulations on insurance companies to do “this” or “that” simply means that the cost of these requirements, whatever they are, are passed on to other consumers, making health insurance policies that much more expensive. Mr. Baca knows this. The sick part is that he wants this, as unaffordable insurance will lead more and more folks to his lair.
5)Ending insurance company rescissions. This is a job for the marketplace. Companies that engage in this practice would not be able to withstand the heat of the free market if the feds would allow such a thing to work in the medical world. This is a simple breech of contract matter, for which no federal law has any place.
6) Taking away the limits of lifetime exposure for insurance policies does what? What’s that? Did you say drive up the price of the policy? DUH!! That’s the whole point. As to his point that this has driven people into bankruptcy, he’s actually right about that. But once again, the primary reason that health care is so expensive in the first place is the very presence of third parties in the marketplace. I still maintain that the focus should be on uncovering the real and rational price of care rather than focus on making sure that everyone has health insurance. Making sure that everyone has coverage will simply drive the price even higher, and rather than bankrupt individuals will speed along the bankruptcy of the country, just as it has in other countries that have tried this approach. Remember that Medicare alone harbors the power to bankrupt this country without adding the insanity of another entitlement program.
The prices for procedures at our facility are a fifth (many times a tenth) of the price across town at a “not-for-profit” big box hospital. I think that we must first determine what medical care should cost using rational pricing (I think this is what Mises called it), that is, pricing transparent to the buyer, before we concentrate on making sure third parties are in place to pay for the medical equivalent of a $2000 toilet seat on a navy ship.
7) This is the medical loss ratio. Says that an insurance company must spend a certain percentage of their revenue on actual health care rather than administration. The purpose of this is to put smaller insurance players (more accountable to their customers than the big boys) out of business. Don’t think Mr. Baca knows this?
8) Government goons determining whether insurance companies can raise rates or not. As you can see above, insurance companies will need to raise rates due to all of the government shenanigans listed above. If the feds then hamstring their ability to do so, what will happen? If you guessed that they will close up shop and let the brilliant, all-knowing bureaucrats in D.C. administer “health insurance,” you, too, go to the head of the class.
Do we need health care reform? Of course we do. But that means getting the government, that wonderous entity that has caused all of the price distortions seen in the medical marketplace in the first place, out of health care. We have published our prices at our facility and the effect on the price of health care in the Oklahoma City market has been markedly deflationary, with more significant price decreases to come. One of our patients benefitting from our reasonable pricing told me that he may cancel his insurance plan as none of the surgical procedures on our list were more than 3 months of premiums for him.
Medical care was affordable until very recently. The hospital bill my parents received for my birth was less than $100. Retired orthopedic surgeons have told me that hospital bills for hip fracture repair were about $300 during the same period (late ‘50’s, early ‘60’s). What happened? Medicare happened. Medicaid happened. Government got in to the act. Mr. Baca wants more of this. To call him a fool lets him off the hook. I think he and others in power who are stumping for this insanity know exactly what they are doing and how they will personally benefit from this life-endangering influence peddling they are engaging in.
G. Keith Smith, M.D.